During his confirmation hearing, Howard Lutnick emphasized the importance of auditing and ensuring that U.S. dollar stable coins are fully backed by U.S. treasuries. These stable coins are a type of cryptocurrency designed to maintain a stable value equivalent to a nation's currency or a commodity.
However, Senator Elizabeth Warren has raised concerns about Lutnick's association with Tether, a dollar-pegged stable coin, as his firm Cantor Fitzgerald holds a significant portion of the assets that support it. Warren accused Tether of financing North Korean nuclear weapons programs and Russian arms companies, alleging that Lutnick and his company profited from these activities.
Lutnick defended Tether during the hearing, stating that as the world's largest stablecoin, it naturally attracts more usage from criminals. Tether enables traders to swiftly transfer large sums of money across borders without the need to convert to traditional fiat currencies.
Proponents of cryptocurrencies argue that requiring issuers to back their tokens with U.S. Treasury bonds would enhance transparency and security in the market. However, they also acknowledge that such a mandate could present challenges for currencies that are unable to comply with regulatory requirements.
